Nokia has agreed to purchase French rival Alcatel-Lucent in a deal worth €15.5bn.
Both companies back the takeover proposal and they expect it to be completed early next year.
The merger will create a telecoms equipment group with a value of €40bn,
Michel Combes is Director General of Alcatel-Lucent: “It’s a growth deal, it’s about company position in an exploding market, which is pulled by traffic and data. It provides enormous opportunities. There are synergies, cost synergies, but also income synergies.”
Rajeev Suri the Nokia CEO believes the move will be a major boost for the Finnish company:
“We will have a strong presence in every part of the world. Together we expect to have the scale to lead in every area we wish to compete.”
Both companies are minor players in their own right, but the combination will give the new company a bigger share of the market making it second only to Swedish giant Ericsson.
The plan will involve a €900m cut in operating costs.
Nokia says it would not axe any jobs beyond what Alcatel-Lucent had in the pipeline.
Before agreeing the deal the French government demanded a no job cuts clause.